Mining stocks are propelling the share market higher after interest rates in China were cut to boost economic growth.
The unexpected move by the People’s Bank of China has raised expectations of an increase in demand for commodities, particularly iron ore, Australia’s largest export, CommSec market analyst Juliana Roadley said.
“Their 12 month deposit rate has been cut as well which means if people leave money in the bank they get less for it,” she said.
“They want people to invest and stimulate the economy rather than leave their money in the bank.
“Base metals are up across the board, but the iron ore price is not doing much, but we might see some reaction in the Asian markets later today.”
Iron ore miner Fortescue Metals enjoyed a significant turnaround from heavy falls last week, up 26 cents, or nearly 10 per cent, at $2.95 at 1200 AEDT.
Almost all miners were higher, with BHP Billiton up $1.21, or 3.8 per cent, at $32.91, Rio Tinto up $1.97, or 3.5 per cent, to $58.38 and BlueScope Steel up 27 cents, ro 5.7 per cent, at $5.04.
BHP has also unveiled new plans to remove a further $2 billion in capital spending and costs by 2017.
The energy sector was another source of strength for the market, with Santos up 38 cents at $12.32, Oil Search up 13.5 cents at $8.705 and Woodside 62 cents higher at $39.47.
Monday’s gains end a run of five straight falls for the share market.
The major banks were also higher, but with more moderate gains.
Commonwealth Bank was up 28.5 cents at $80.375, ANZ had gained nine cents to $31.91, Westpac was up 29.5 cents at $32.545 and National Australia Bank was 17 cents higher at $32.44.
KEY FACTS
* At 1200 AEDT on Monday, the benchmark S&P/ASX200 index was up 61.3 points, or 1.16 per cent, at 5,365.6 points.
* The broader All Ordinaries index was up 60.4 points, or 1.14 per cent, at 5,352.5 points.
* The December share price index futures contract was 66 points higher at 5,374 points, with 19,223 contracts traded.
* National turnover was 561 million securities worth $1.13 billion.
